Creating Purpose-Driven Organizations

July 14, 2023 2 min read

According to Henderson & Van den Steen, corporate purpose can be defined as a concrete goal or objective for an organization that reaches beyond profit maximization. It is a set of common beliefs, shared by the members of an organization which guides employee actions. In comparison to a company’s mission describing “what” a company does, a corporate purpose explains “why” a company engages in a certain type of organizational behaviour. 

For decades, the only purpose for most organizations has always been to reach their financial objectives and maximize profits. However, nowadays, some scholars argue that having a strong corporate purpose can improve an organization’s performance in two ways.

That firstly, purpose can drive employee engagement and through this, bring an increase to employee effort and productivity, and secondly, that it can affect external stakeholder groups. For example, that it increases customer satisfaction and drive loyalty. 

But why should organizations care?

Organizations should care because according to a recent survey, the main concerns of young workers include topics such as climate change, environmental protection, and income inequality. So when asked about what businesses should try to achieve, next to traditional business-related objectives, millennials believe that firms should pursue goals beneficial to society. Therefore, given that millennials alone will make up about 75% of the modern global workforce by 2025, firms ignoring these sustainability issues may find themselves having difficulties becoming or remaining an employer-of-choice in the future. 

In addition, these studies also confirm that firms have been found to improve their performance when employees, as well as mid-level managers and senior executives believe in the purpose of the organization and when the pathway to reach this purpose is clear. Also, higher job performances and stronger organizational commitments have been observed among employees who perceive their work as more meaningful. 

How can managers and workplace leaders create purpose driven organizations?

There are several basic steps that will help managers to create purpose-driven organizations, they include;

1. Envisioning an inspired workforce – assess the purpose that drives excellence in your company and imagine how it can permeate the corporate workforce

2. Discover the purpose – use tactfulness to gain a better understanding of the common needs of your workforce

3. Recognize the need for authenticity – employees detect hypocrisy, therefore you have to turn the authentic message into a constant message, and look for permanent solutions that ensure commitment

4. Stimulate individual learning – implement structures that help employees to reflect on the corporate purpose and be part of it. 

5. Turn mid-level managers into purpose-driven leaders

6. Connect the people to the purpose – explain how employees’ daily activities are connected to the corporate purpose

7. Unleash the positive energizers – identify and support the employees in the firm who naturally inspire others.

Conclusion

In conclusion, creating a purpose-driven organization will assist in helping organizations to align employees, attract top talent, enhance performance, build customer loyalty, increase adaptability, drive social impact, and strengthen stakeholder relations. In fact, the benefits extend beyond financial gains, creating a positive work culture and contributing to a more sustainable and purposeful future.

58 thoughts on “Creating Purpose-Driven Organizations”

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